Sunday, October 10, 2010

All that is known about the immediate future of Liverpool Football Club is this: at 1.30 next Sunday, Roy Hodgson's side will take to the field for the Merseyside derby at Goodison Park. Steven Gerrard will wear the captain's armband, Fernando Torres, injury permitting, will lead the attacking line.

For the 214th time, red will face blue. Everything else is shades of grey.

Liverpool, perhaps for as much as the next seven days, exist in a state of duality. The side that Hodgson picks to face Everton may have six Premier League points, or they may have, in effect, minus three. Their wages may be paid from Dallas, from Boston, from Gogarburn or from points unknown.

They may be supported from the Paddock by fans relieved that the nightmare of the last three years, the toxic reign of Tom Hicks and George Gillett, is over and a new era under New England Sports Ventures (NESV) has begun. They may find the protest songs that have replaced more traditional serenades are spat with greater ferocity than ever.

They may have a bright future, or they may seem to have no future. It may all be over, or it may all just have begun. Liverpool are the Premier League's version of Schrodinger's cat. They are a club caught in existential limbo, simultaneously alive and dead.

At the High Court this week, chairman Martin Broughton must prove that Hicks and Gillett not only signed over to him the right to appoint and remove directors, but agreed he could sell the club for what he felt was the best offer.

Hicks and Gillett, in turn, must prove the NESV offer is not reasonable, and both that their higher valuation of the club is realistic and that someone may be willing to pay it.

Which Liverpool side -- the one imbued with purpose, or the one mired in doubt -- attends Goodison Park may well be decided on the Strand.

If Broughton is proved correct then it is likely to be the former, as a club inspired by the sight of its new owners in the directors' box finally feels the gloom has lifted. If Hicks and Gillett win, even after an appeal that will be heard within 72 hours of the original case, then it will be the latter.

It is here that Liverpool's future becomes complicated. If Broughton is unsuccessful, then the sale will not proceed. On Friday, RBS will call in their debts. Unless Hicks and Gillett can pay back around £200m -- and all attempts to raise that funding have failed -- then the club, or, more accurately, its holding company Kop Football, will be taken into administration.

That, too, has dual ramifications. It is positive, in that it would effectively force Hicks and Gillett out as RBS seize control and look to complete a quick sale, perhaps costing the Americans a further £110m in personal guarantees and most likely presenting the club to NESV.

It is negative, though, because the Premier League would be minded to dock Liverpool nine points, three more than they have.

It is not nearly so simple as that, though. Regardless of how the court finds, if Hicks and Gillett pay back their debts in the next six days -- however hypothetical that seems -- then they remove much of the bank's leverage. They would be able to stop the sale, buying crucial time to remove directors.

Yet even that is a shorthand. Hicks and Gillett as a dual entity no longer exist. The latter has been replaced by Mill Financial, the company with whom he took out a $75m (£47m) loan in December 2008 with his 50 per cent share in the partnership that owns Liverpool as security. He has defaulted on that loan, and Mill, a division of Springfield Financial, have called it in.

Sources in the US insist that is simply a legal measure; Liverpool and RBS believe it is not a complicating factor. Yet both sides are concerned enough to have had contact with Mill in the past few days.

That Hicks's two would-be directors are both his loyalists indicates he cannot be sure of Gillett's place on the board.

That is how unclear Liverpool's future is: not only is Broughton trying to sell a club he does not own, not only is Hicks trying to hold on to a club he did not pay for, half of that club belongs to a real estate company based in Arlington, Virginia, and their intentions -- though most likely simply to recoup their money -- are shaded in grey.

Liverpool can only hope that, by the time red and blue face each other, everything else is black and white.

Jamie Carragher's testimonial committee had three basic wishes when, more than two years ago, they started preparing for his big day. Everton would provide the opposition; local charities would receive the proceeds; and the game would be the first at Liverpool's grand new stadium on Stanley Park. On 4 September this year they fulfilled two out of three. At Anfield.

Like many before them, they were long ago resigned to the fact that option three was an illusion.

The frustrations of Carragher's committee were trivial and brief in comparison to those suffered by Liverpool supporters, and by residents of one of the most deprived local authority wards in Britain, for whom a new stadium was presented as key to regeneration and 1,000 new jobs in the late 1990s.

This week, given the right result in the high court, New England Sports Ventures will be tasked with delivering an arena that is essential both to the revival of Liverpool FC and a community. The contentment of Fernando Torres and promised transfer sprees deliver headlines that win immediate support for prospective new owners, but it is how quickly they construct a solution to a 40-year-old problem will determine Liverpool's long-term fortunes.

John W Henry and his 16 fellow investors in NESV do not yet have control of Liverpool but there is already scepticism over their prospects. The club's astute former chief executive, Peter Robinson, identified the constraints at Anfield when calling for a joint stadium with Everton in the late 1960s. It was an inability to fund a new stadium that prompted David Moores to sell to Tom Hicks and George Gillett, and the main reason the Americans lost their business model and trust at Liverpool.

"If they had not been leveraged then they would have started the stadium, and we wouldn't be saying what terrible guys these are," said Martin Broughton, the Liverpool chairman attempting to sell the club against the wishes of the American co-owners.

As regards the income-generating potential of a big, modern stadium, Liverpool have been left trailing by a growing number of rivals for more than a decade. A commitment to build, and to inject £100m in cash into the project, was a condition of the sale process conducted by Broughton and the chief executive Christian Purslow, and it was the track record of NESV in redeveloping the Fenway Park home of the Boston Red Sox that swayed a majority on the Liverpool board. The club had received an identical £300m offer, of which £240m is cash, from a rival suitor in Asia.

NESV will not arrive blind to the situation should they be installed as owners this week. The group have already held discussions with the Royal Bank of Scotland over financing a new stadium through, as Broughton put it, "a sensible, normal level of debt and equity". Joe Anderson, the leader of Liverpool city council, is also primed to meet owners he has welcomed but whose intention to consider redeveloping Anfield he opposes.

Liverpool and the Anfield area have deteriorated in tandem while the club have remained at their iconic, atmospheric but financially constrained 45,362-capacity home. Given the respective revenue streams of England's leading clubs it is no surprise that Rafael Benítez, and Gérard Houllier before him, frequently complained about the expectation to deliver a first league title since 1990 on such an uneven playing field.

In the financial year 2008-09, Liverpool earned £42m from gate and match-day income. Manchester United generated £109m and Arsenal £100m in the same period. United's good fortune in having access to acres of land to redevelop Old Trafford, and Arsenal's exhaustive fight to construct the Emirates, means they earn more from home matches per season than from TV and broadcasting. Liverpool are among those clubs for whom TV and broadcasting revenue outweighs match-day earnings.

Liverpool's commercial income has tripled in recent years under director Ian Ayre, however, helping the club achieve a record income of £185m in the year ending 30 July 2009. That, and Liverpool's mass global appeal, ensures that in two of the three main revenue streams for Premier League clubs – commercial activities, broadcasting rights and match-day – Liverpool fare impressively. Once the interest payments on debts built up by Hicks and Gillett are no more – last year they stood at almost £40m – their spending power increases further. But they will continue to languish behind their competitors without a new stadium that can seat 60,000-plus, and now is not the time to be found wanting.

Manchester City embody the race to cement a place in the Champions League and close the drawbridge on the rest before Uefa's financial fair-play rules come into effect in 2012-13. The rules "encourage clubs to operate more responsibly by not spending more than they earn", according to Uefa, and will prevent clubs that are bankrolled by billionaires competing in Europe unless they break even over a rolling three-year period. Debt taken on to build a new stadium does not enter the Uefa equation, so Tottenham, with planning permission for a new 56,000-seat stadium near White Hart Lane and an application in to lease the Olympic Stadium after 2012, have also stolen a march on Liverpool.

"The financial fair-play rules come into effect pretty damn soon so taking a rational, commercial approach to success is absolutely the right way forward," insists Broughton. "I couldn't help notice that Manchester City's wage bill for last year was exceeding its revenue. That is going to be very difficult under financial fair play. They might be able to sort it out before then but we were not looking for someone who was going to put us in that position. We were looking for somebody who was going to see this as a commercial business that can be commercially successful."

Liverpool chairman Martin Broughton has revealed that he "scoured the world" in search of a sugar daddy owner in the mould of Roman Abramovich and Sheikh Mansour bin Zayed al-Nahyan but failed to find one.

While a section of Liverpool fans are concerned it will be a case of out of the frying pan into the fire by swapping one set of American owners with another, Broughton attempts to ease their worries in an exclusive interview with ESPNsoccernet while away in the States.

Instead of a billionaire, Liverpool will have a few multi-millionaires, and in the financially-competitive Premier League there is some scepticism about the men who own Boston Red Sox, New England Sports Ventures.

From his Washington hotel, Broughton told ESPNsoccernet that it might turn out to be better in the long run.

Broughton explained: "We searched the world looking for another owner like the ones at Chelsea and Manchester City. With all of Liverpool's traditions, heritage, history and powerful global brand, I must admit I thought it would be possible to find one.

"We hoped for someone who wanted a 'trophy asset', but having scoured the world without finding one, the conclusion is that there are no more Romans out there.

"Yes, of course, it is disappointing that even a name like Liverpool failed to attract one, so I cannot imagine other club having much luck."

I suggested to Broughton that it is very optimistic to believe that there are sugar daddies queueing up to buy Premier League clubs, when in reality that is not the case. The majority of Premier League clubs would leap at the chance of a takeover, and Liverpool at last have one, while many are still waiting in hope to clear their debts.

Broughton said: "Yes, everyone is aware of how many Premier League clubs there are for sale, but Liverpool is different, at least it should have been different, as it is a global brand compared to some of the other clubs, and for that reason you would have thought it would have appealed to a sugar daddy.

"But the truth is that there is only one Roman Abramovich, there is only one Sheikh Mansour, because we couldn't find another one."

Chelsea cost their Russian owner less than £70 million, taking control with a £17 million buyout of Ken Bates, although he invested half a billion from that point. It was the same at Manchester City, where there wasn't a premium price tag.

Broughton added: "With Liverpool, whatever the price to buy it, came a heavy obligation to spend something like £300 million on a new stadium, and £350 million of debt or an obligation to turn that into equity. Liverpool came with some heavy numbers, whereas Abramovich paid very little to gain control of Chelsea.

"So no matter how far and wide we looked there was no evidence of a sugar daddy type around.

"Perhaps it will end up being to our advantage, when the financial fair play rules apply in 2013, we will have the ideal owners in a way, owners who understand the commercial realities of a running a club and running a sporting team, and how to invest in the team, and produce a winning team.

"More reality will come in to football, and it is important that our supporters take this aspect on board. Put Manchester City to one side, and how many big money transfers were there this summer? Not that many. Reality is setting in across the board."

Liverpool's ace card against Tom Hicks and George Gillett in the looming court case is that the £300 million takeover by New England Sports Ventures is actually in the best interests of the outgoing owners - because it wipes out a massive £110 million worth of personal guarantees to the Royal Bank of Scotland.

Hicks and Gillett stand to lose a total of £254 million if the move by the owners of the Boston Red Sox collapses and they cannot find a replacement new owner by Friday.

In another twist, leaked minutes from a Liverpool board meeting allegedly contain Hicks making personal and abusive comments about Liverpool fans, which will rake up the hatred felt by the supporters against the current owners. However, it is impossible to see how much more despised Hicks and Gillett can become.

More importantly, ESPNsoccernet can exclusively reveal the cornerstone of Liverpool's case is that the takeover is in everyone's best interests. The hearing is not likely until Tuesday at the earliest. An inside source said: "It's in Hicks and Gillett's best interests, the board will argue, because it caps their losses at £144 million. Part of the deal with NESV is that the Royal Bank of Scotland wipe out the £110 million of personal guarantees."

An out of court settlement with Hicks and Gillett cannot be ruled out as the board is so confident that they will win the court case. Martin Broughton cannot comment on the specifics of the case, but the Liverpool chairman has told ESPNsoccernet that he believes he can win the case and the takeover can go through.

Behind the scenes 'negotiations' are clearly going on between the warring factions aimed at avoiding a messy public court hearing that would tear the club apart. Equally, the court hearing, which comes just days before Friday's deadline with the Royal Bank of Scotland, is unlikely to be the end of the legal wranglings, as whoever losses the initial hearing is sure to seek an appeal.

On the issue of an appeal, Liverpool's lawyers will argue that if Hicks and Gillett lose and the takeover can go through, and they call for an appeal, it would seriously jeopordise the takeover, and potentially throw the club into administration, thereby putting the club's surviva at risk.

If the legal actions drag to a second hearing, it is inevitable that RBS will have to take some decision on Friday, most likely to suspend the outcome of whether to put the club into administration pending the final court room verdict.

The logical solution is for both sets of lawyers to find some sort of middle ground, even if it is a settlement on the steps of the High Court. There is no direct contact anymore between the factions, with Hicks and Gillett on one side and the three English members of the board led by Broughton on the other.

Broughton told ESPNsoccernet exclusively: "All of these issues I cannot possibly comment on, as this is going to court, one would assume. We have no date for the hearing yet, but we are told it is a 'short order' and so it would be any day hopefully early next week.

However, without going into any legal detail, Broughton said: "Yes, I am confident we shall win. However we all know when you have to sets of lawyers they are both telling you that they are 100% confident that they will win."

Kenny Dalglish was asked on Saturday if he wanted to return to football management, and the Liverpool legend chose not to rule out his potential comeback.

The name of Dalglish echoed around Anfield at the end of Liverpool's recent 2-1 defeat to Blackpool, with many fans believing the Scot should have been handed the manager's job after Rafael Benitez departed. Dalglish did offer his services over the summer but was flatly ruled out of the equation by chairman Martin Broughton.

However, after Roy Hodgson took his league record to one win in seven with the Blackpool defeat, the possibility of Dalglish taking on a second stint as the Reds' manager appears to be back on the horizon.

The club expects to have new owners within a week's time as New England Sports Ventures attempts to complete the takeover of Liverpool Football Club, and Broughton recently confirmed that, while the new owners have confidence in Hodgson, the current manager does have a release clause in his contract.

Dalglish has far too much respect for Hodgson to put him in an unenviable position by reiterating his desire to take the reins at Anfield, but the club's most revered player could not deny his interest when asked over the weekend.

"First of all you need to be asked, second it needs to be suitable if you were asked," Dalglish told Reuters.

"Because you don't say 'No', people think you say 'Yes' but that is not necessarily true either. I wouldn't say anything other than I am really happy at the moment. There is nothing definitive either way."

Liverpool chairman Martin Broughton has confirmed to ESPNsoccernet that the future of manager Roy Hodgson following a takeover is catered for in the provisions of his contract.

Prospective owners New England Sports Ventures (NESV), led by John W Henry, plans to sit down with Hodgson once the deal is complete to discuss his vision for Liverpool's future.

The men who own the Boston Red Sox have no immediate plans to install their own manager but Broughton was brutally honest about the situation Hodgson now faces, and how Hodgson entered into his Liverpool contract with his eyes wide open.

In an exclusive interview with ESPNsoccernet, Broughton revealed: "Roy knew when he signed up from Fulham that we were in the process of finding new owners, it was not a surprise to him. He was fully reconciled with the possibility there would be an ownership chance and the risk involved with that.

"But Roy is self confident and was, when he signed up, confident he was capable of doing the job at Liverpool. With that in mind provisions were made in Roy's contract to relate specifically to any change in ownership."

The 'break clause' in Hodgson's contract was revealed by ESPNsoccernet this week, although even then there were no hints that a change in manager was being planned immediately.

"I suggested that the clause relates to Hodgson being paid a full year's salary within 28 days should the new owners want to bring in their own manager," Broughton commented: "I don't have Roy's contract in front of me, so I can't comment on that, but it is something like that in his contract.

"But he came to the club knowing full well the circumstances and the risks attached to it."

Hodgson will have to prove himself to the new owners. Broughton added: "I would full expect Roy to continue as manager and there has been no indication to me to suggest otherwise. However, as we all know, at the end of the day, everything depends on results."

Liverpool's U18s went down to a 3-2 defeat at Blackburn Rovers on Saturday afternoon.

The young Reds led at the interval thanks to a strike from Adam Morgan and could have been two ahead had Raheem Sterling's earlier effort not been ruled out for offside.

But the home side hit back after the break with an equalising goal from Jamie MacLaren and then took the lead from the penalty spot after a hotly disputed handball decision.

Things got worse for Rodolfo Borrell's men when Matthew Regan was sent off for the Reds, before MacLaren netted again to give Blackburn a two-goal cushion.

Adam Morgan netted his and Liverpool's second late on, but it wasn't enough to salvage anything from the match - and to compound the Reds' misery Craig Roddan was shown a red card after the final whistle.